Table of Contents
ETH Destruction Reaches Historic Low
Nansen Analyst: Whales Are the Only ETH Buyers
Ethereum introduced EIP-1559 in its 2021 upgrade, which not only simplified the transaction fee mechanism but also mandated the network to destroy all ETH used to pay for base transaction fees. This mechanism aims to reduce inflationary pressure and make Ethereum a deflationary asset during peak network activity.
However, data shows that the amount of ETH destroyed on the Ethereum network hit a historic low on Saturday, indicating a significant decline in demand for Ethereum block space. According to data from The Block, only 53.07 ETH were destroyed on Saturday, worth approximately $106,000 at current prices, marking a historic low.
Based on the data from Ultrasound.money, if estimated by the destruction rate over the past 7 days, the ETH supply is expected to grow by 0.761% annually.
The decline in the ETH destruction rate coincides with a drop in other activity metrics on Ethereum, such as the number of active addresses. According to data from The Block, the seven-day moving average of active addresses recently fell to its lowest level since October 2024. Additionally, the number of new addresses created, transaction volume, and daily transaction amounts have also decreased in recent weeks.
Standard Chartered recently significantly lowered its Ethereum price forecast for 2025 from $10,000 to $4,000. According to a previous report by Zombit, the bank’s Global Digital Asset Research Director Geoffrey Kendrick stated in an interview with The Block that the reason is the expansion of Layer 2 networks: “Layer 2, especially Base, is now extracting excess profits from the Ethereum ecosystem.”
Nansen Analyst: Whales Are the Only ETH Buyers
However, despite the underwhelming fundamental data, some investors still believe that the current price level is an opportune time to accumulate Ether. Nansen research analyst Nicolai Sondergaard recently pointed out in an interview, “Whales holding between 10,000 and 100,000 ETH have actually been accumulating ETH, while other investors are selling.”
On the other hand, according to data from Glassnode, the number of addresses holding at least $100,000 worth of Ether has been on the rise since early March, increasing from over 70,000 on March 10 to over 75,000 on March 22.